The first reason for this difference is that last year there was no single development for these residences in place, except for purchases of buildings for eventual conversion into residences and grounds. In contrast, this year it is predicted that several residence and related portfolio operations will close, such as the sale to The Student Hotel by the Oaktree Capital Management fund of the former print shop la Cuesta de San Vicente in Madrid to be converted into student accommodation, which was announced today.
In this context, JLL has produced the report “The market for student residences in Spain”, which analyses for the first time the importance and forecasts for this market segment within the Spanish real estate panorama.
In fact, the initial yield from such prime residences in Spain is 5,75%, above countries such as the United Kingdom and Germany (5% in both cases), where the market is well developed.
At the end of 2016, Spain had a total of 1,129 university and larger college residences, with just over 91,000 beds. By autonomous community, Madrid has the highest number of beds, 19% of the total, followed by Cataluña (15%), Castilla y León (14%) and Andalucía (12%). Between these four communities there is 60% of the total stock in Spain.
There is a big difference between the projection of estimated demand, and actual supply, given that 375.000 students are seeking accommodation (in student lodgings or in rented housing in Spain). If it is predicted that over the next few years only about 2,000 new beds will come on to the market it is clear that it is necessary to generate much more supply to meet this demand.